automotiveDAY: At Local Motors, crowd-sourcing provides a new car-building model

March 9, 2012

LM's Rally Fighter may well be the world's first crowd-sourced car (Photo: Local Motors)

HANOVER — Local Motors (LM) has set out to prove that, contrary to the common wisdom in the auto industry, scale is not a necessary requirement for becoming a successful carmaker.

The Arizona-based upstart, which has already built one production car, is trying out an unconventional approach to car building. It is attempting to build the first open-source cars, using input from a broad range of designers, engineers, auto enthusiasts and others who each want to contribute something – mostly online – to the product-development and production process.

“We gave up the assumption of mass production and said we want to do small-scale production to serve a local market,” said Jay Rogers, CEO and co-founder of Local Motors. “We want to create a car with less expense, less investment and better ideas.”

The first car LM built is called the Rally Fighter, a mix between a desert racer and an on-road touring car. It is produced in a micro-factory in Phoenix, Arizona in small volumes.

But contrary to the way big automakers develop new models, LM relied mostly on an internet community of 25,000 members in 122 countries who embarked on a process of continuous improvement and change as the model took shape.

Rogers came to the CeBIT high-tech fair here in part to accept an award for “Leader in the digital age” or LIDA from the German regional state of Lower Saxony. The award recognizes managers who develop new business models based on the opportunities provided by the interconnected world.

Addressing the annual automotiveDAY conference, Rogers said his Phoenix plant can build 200 cars a year. He doesn’t want to have factories with capacity of more than 2,000 units.

LM relies on an extensive support network throughout the car industry. Said Rogers: “We couldn’t exist without large automakers or suppliers.”

The car entrepreneur sees global potential and its concept of small, locally focused plants. “We’ve had 35 requests to set up plants from across the world,” he said. “We hope you’ll see a micro-factory in Germany and elsewhere.”

And as the LM community grows, Rogers said he hopes to provide an opportunity for its members to sell their products directly through LM channels.